Lyon reluctantly ships tax break to state

YERINGTON - County officials agreed with a tax reduction for a Fernley deck manufacturing firm, but not without some sharp words for the state's tax abatement program.

Lyon County commissioners on Thursday unanimously agreed to recommend to the Commission of Economic Development the state allow TREX, Inc., a 75-percent abatement on personal and real property taxes for a $64 million plant expansion. However, the board reduced the length of the exemptions to five years each from the respective 10 and 20 years allowed by state statute.

Commissioner David Fulstone said the county should be very cautious in the considering future consequences of long term tax abatements and expressed concern the loss of revenue would have on special districts throughout the county.

"No one has the ability to see what the consequences of what we do today will be 10 to 20 years down the road," he said. "We also have to look at the other tax abatements the county has already granted.

"It bothers me that it is not just the county giving up this tax. When we vote for this, we are taking a small amount from the general fund and the road fund, but we are taking it away from a whole lot of other people who have not really had a lot of say about it. All special districts are affected. We can't take away the basic services the people have indicated they want. That is why I have such a problem with it."

Commissioner LeRoy Goodman agreed, but pointed out it was a legislative issue and not the fault of TREX.

"We need a workshop before the Legislature meets and get our concerns out there as to what this does. This is not just for Lyon County. This is for every county, especially the rural counties."

According to County Assessor Dennis Compston, the abatement will result in a per year loss of approximately $72,000 to the county general fund and $225,000 to the school district. The Fernley Fire District would lose approximately $23,000.

As a new plant, the county granted TREX the 75-percent abatement for the full 10 and 20 years respectively on personal and real property taxes in October 1998.

Tim Rubald, Director of Business Development for the Nevada Commission on Economic Development, said the county should look at what they will be receiving, not what will be abated.

"I want to note TREX has the ability to withdraw all of this. They do not need to do this expansion. I think we need to balance the negative aspect with the fact you will be receiving an additional $60,000 every year that you are not receiving now."

TREX Plant Supervisor Kurt Borgoyn also asked the board to look at the positive aspects new businesses like TREX brings to the county.

"We are bringing a lot of good jobs and paying very good benefits. There are other intangibles that a company like TREX brings in that weigh in also," he told the board. "There is a big discussion out there with companies on where they are going to come to. This county needs to look at the impression they are going to make to new companies looking at Lyon County."

Fulstone responded strongly to insinuations TREX would not expand or possibly move out if exemptions were not granted.

"I do not think the county is forcing anyone to not expand or move out. I don't like having this thrown in my face all the time. It is not a good strategy to use. These things need to be negotiated," he said.

The board voted on Oct. 5 to recommend a 25-percent abatement on real and personal property taxes for a period of five years; however, state law states the abatement for companies recycling at least 50 percent of their product on sight cannot be reduced from the prescribed 75 percent. Thursday's vote put the recommendation in compliance with the law.

The Commission of Economic Development is not bound by the county's wishes and may extend the length of the abatements to the full extent allowed - personal property taxes for 10 years and real property for 20 years.